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Broken Bonds: Chicago routinely uses bond money to paper over its budget problems
Chicago Tribune ^ | November 1, 2013 | Jason Grotto, Heather Gillers, Patricia Callahan and Alex Richards

Posted on 11/03/2013 1:57:05 AM PDT by Cincinatus' Wife

Last year’s payments on the city’s general obligation debt represented 12 percent of all government expenditures and ate up 63 percent of property taxes collected."

When municipal officials want to build for the future, they have a powerful financial tool at their disposal: general obligation bonds that yield millions of borrowed dollars. The money is meant to let cities move forward on costly projects that will serve the community for decades.

But in an unprecedented analysis of Chicago’s finances, a Tribune investigation found that city officials have long abused their borrowing privileges, spending funds meant for long-term initiatives on problematic short-term expenses from library books to legal settlements.

Residents know little about it, as Illinois law doesn’t require Chicago to ask voters’ permission before issuing bonds. And when the city can’t pay what it owes, it uses yet more borrowed money as leverage to push off payments on old bonds.

This pattern of fiscal recklessness, which started under former Mayor Richard M. Daley, created a mountain of debt that threatens the financial future of the city. Now Rahm Emanuel is groping for ways to deal with the problem along with a looming pension crisis and chronic budget deficits.

"It's Like a Cancer"

[SNIP]

"Chicago’s bond debt has grown even as it spends more and more public money to make annual payments. Meanwhile, less of that money is going to pay down the principal on the loans. In 2012, more than 60 percent of the city’s debt payments went to cover interest, up from 26 percent in 1995. Last year’s payments on the city’s general obligation debt represented 12 percent of all government expenditures and ate up 63 percent of property taxes collected."....

[SNIP]

(Excerpt) Read more at apps.chicagotribune.com ...


TOPICS: Business/Economy; Crime/Corruption; Extended News; Government
KEYWORDS: bonds; debt; taxes

1 posted on 11/03/2013 1:57:05 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
Good morning..

Like Daylight Savings time..Chicago is "falling back"..LOL

Another sterling example of Margaret Thatcher's maxim that "socialism works until you run out of other people's money."

The Detroit bankruptcy case, where they can't pretend, or hide any more of the fiscal shenanigans, is like shining a flash light into a dark cellar..all the cockroaches are running for cover..

2 posted on 11/03/2013 1:01:09 AM PST by ken5050 (Benghazi investigation update: "The plot thickens, like Hillary Clinton's ankles.." (longfellow")
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To: ken5050

Good morning!


3 posted on 11/03/2013 1:05:16 AM PST by Cincinatus' Wife
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To: Cincinatus' Wife

Don’t know why they’e talking about Chicago..Illinois is 100x worse off fiscally. That’s why Daley decided NOT to run for governor..he’d have won easily..who KNOWINGLY sign up to be the next captain of the Titanic?


4 posted on 11/03/2013 1:08:19 AM PST by ken5050 (Benghazi investigation update: "The plot thickens, like Hillary Clinton's ankles.." (longfellow")
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To: ken5050

How much higher can they raise taxes?

How long can they withstand loses from business taking flight?

How long can they cook the books?


5 posted on 11/03/2013 1:12:48 AM PST by Cincinatus' Wife
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To: Cincinatus' Wife

“Livin’ On A Prayer”

Once upon a time
Not so long ago

Tommy used to work on the docks
Union’s been on strike
He’s down on his luck...it’s tough, so tough
Gina works the diner all day
Working for her man, she brings home her pay
For love - for love

She says we’ve got to hold on to what we’ve got
‘Cause it doesn’t make a difference
If we make it or not
We’ve got each other and that’s a lot
For love - we’ll give it a shot

[Chorus:]
Whooah, we’re half way there
Livin’ on a prayer
Take my hand and we’ll make it - I swear
Livin’ on a prayer

Tommy’s got his six string in hock
Now he’s holding in what he used
To make it talk - so tough, it’s tough
Gina dreams of running away
When she cries in the night
Tommy whispers baby it’s okay, someday

We’ve got to hold on to what we’ve got
‘Cause it doesn’t make a difference
If we make it or not
We’ve got each other and that’s a lot
For love - we’ll give it a shot

[Chorus]

We’ve got to hold on ready or not
You live for the fight when it’s all that you’ve got

[Chorus]
https://www.youtube.com/watch?v=lDK9QqIzhwk


6 posted on 11/03/2013 1:18:56 AM PST by Irenic (The pencil sharpener and Elmer's glue is put away-- we've lost the red wheel barrow)
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To: Cincinatus' Wife

How deep can they reach into FedGovs pockets with Dear Leader
In the White House?


7 posted on 11/03/2013 1:19:56 AM PST by Kozak ("Send them back your fierce defiance! Stamp upon the cursed alliance! To arms, to arms....."e)
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To: Cincinatus' Wife

Until they can’t....


8 posted on 11/03/2013 1:21:29 AM PST by ken5050 (Benghazi investigation update: "The plot thickens, like Hillary Clinton's ankles.." (longfellow")
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To: Kozak

Better scream UNCLE before February or be connected to prezzy boys Friday EO EPA crony group of glob-of-bull warm bullshite governors.


9 posted on 11/03/2013 1:26:23 AM PST by Irenic (The pencil sharpener and Elmer's glue is put away-- we've lost the red wheel barrow)
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To: Cincinatus' Wife

12% of the expenditures and 63% of the property taxes.

That’s pretty bad. Besides the property taxes, income to the city wouldn’t normally be that much - unless there were an income tax, or a city sales tax.

If they don’t have the income tax already, they will have sooner or later. It would be prudent to expect both.


10 posted on 11/03/2013 2:29:36 AM PST by Gaffer
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To: Cincinatus' Wife

Municipalities paying current expenses with bond debt is usually against the law. It may be a criminal misallocation of funds.


11 posted on 11/03/2013 3:45:16 AM PST by SC_Pete
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To: Cincinatus' Wife

he United States Government is buying Bonds too.

Only they are buying Bonds that they print on the ame press as they print the money they buy them with.

The paper is too thick for Toilet paper and cannot be used for anything else. Worthless.


12 posted on 11/03/2013 3:46:43 AM PST by Venturer (Keep Obama and you aint seen nothing yet.)
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To: Cincinatus' Wife

The cancer called ratism


13 posted on 11/03/2013 4:48:29 AM PST by ronnie raygun
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To: Cincinatus' Wife

Isn’t this how Democrats always govern, at every level? This sounds awfully familiar.


14 posted on 11/04/2013 1:25:28 AM PST by Steve1789 (T)
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To: Steve1789

Yes it is. And that’s why every city and municipality controlled and run for decades by Democrats, is bankrupt and a miserable, dangerous place to be.


15 posted on 11/04/2013 1:34:58 AM PST by Cincinatus' Wife
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